Procedure on How to Apply for a Standby Letter of Credit in Kenya You can approach your bank to obtain a standby Letter of credit. The concerned officer at bank will help you in filling up necessary application to obtain a standby Letter Credit.
- A standby letter of credit will typically be in force for about one year, allowing for enough time for payment to be made through standard contractual guidelines.
- You can approach your bank to obtain a standby Letter of credit.The concerned officer at bank will help you in filling up necessary application to obtain a standby Letter Credit.
- Since the standby Letter of Credit is to allow you for the exemption of any taxes that would have otherwise been levied for entering such equipment into Kenya, you should submit to the airport authorities a standby letter of credit whose value should match that of the equipment you are planning to bring into Kenya.
- A standby letter of credit is a tool that provides a sense of security for the filming equipment while in Kenya.
- This letter exempts you from having to pay any custom dues, under the agreement that the equipment will be taken out of the country again when you leave.
- Things can go wrong in any kind of transaction, so it’s nice to have a backup plan. Whether the Filming equipment is being sold is a service or a shipment of physical goods, a standby letter of credit can provide protection.
- The cost to obtain a standby letter of credit is typically 1-8% of the face amount annually, but the letter can be canceled as soon as the terms of the contract have been met by the purchaser or borrower.
- A standby letter of credit (as opposed to a commercial or documentary letter of credit) is drawn up with the understanding that it will not be drawn upon unless the bearer of the letter fails to fulfill his or her side of the agreement (the subsequent removal of all equipment that was initially brought into the country).
How to apply for a Standby letter of credit in Kenya.Step 1
- The Applicant. This is the customer of the bank who applies to the bank for the standby letter of credit that has a branch in Kenya and apply for a stand by letter of credit, your sponsoring news organization must have a relationship with home bank that has a branch in Kenya,the concerned officer at bank will help you in filling up the necessary application and take you through all the necessary steps.The applicant must provide collateral to the bank or have sufficient credit to induce the bank to issue the
- Attach the necessary documents on the application including the guarantee letter from sponsoring news organization. This letter must show that the sponsoring news organization will agree to post the amount of money needed to issue the letter of credit,and has to be produced along with other required documents. Your bank may ask you to keep certain percentage of margin amount with the home Bank.
The beneficiary pays the Confirming Bank a fee for this convenience. The Confirming Bank then collects from the Issuing Bank the amount paid to the beneficiary.This is the bank that represents the beneficiary. It may accept the letter of credit on behalf of the beneficiary and collect on it on behalf of the beneficiary. In order for the transaction to be a bank-to-bank transaction, the advising bank works for the beneficiary to keep the instrument in the banking system. Sometimes the Advising Bank also is the Confirming Bank, but not always.Step 4
Obtain the letter of credit from the Bank,This is the applicants bank that issues the standby letter of credit.This is a bank (usually located near the beneficiary) that agrees (confirms) to pay the beneficiary rather than have the issuing bank pay the beneficiary.
- Once you have obtain a standby letter of credit from your home Bank then submit your application to the Press Office at the Kenyan Embassy in your home country before time, to allow the processing of permits.
- When the Journalist is planning to take ONE camera into Kenya, the delegation or journalist can simply state the information on his passport and therefore there is no need to submit a letter of credit.
- There are places that may require special permit in case you wish to film additional places or areas your permit does not cover; note that this might result in you having to prolong your stay in Kenya.
- You should be careful with all your equipments and that you make sure not to lose anything during your trip; however in the event of loss please contact the Government Press Office in Nairobi or register your claim at the nearest police station in Kenya.
- Scanned Valid National Passport (minimum period validity 6 months at the time of travel)or any acceptable Travel document;
- Printed copy of a completed Online Visa Application Form(with one passport size photograph attached), and a copy of Payment Confirmed page;
- A letter of invitation from local contact(s) in Kenya;
- A letter of introduction from the organization(s) that journalists work for or represent;
- A copy of itinerary while on duty in Kenya;
- List of equipment accompanying applicant(s);
- Scanned copy of your passport’s bio data page (the page with your photo).
- Your profession.
- Estimated date of arrival.
- Payment.Visa Fee (cash only)Paid in advance
- Application form
- A valid Passport.
- Two recent passport photos.
- Visa reference number (from Kenya).
- Letter from newspaper or the TV network or the news agency that is sponsoring the traveling delegation or journalist(employer).
Office Locations & Contacts
Central Bank of Kenya.
Haile Selassie Avenue,
P.O Box 60000-00200,
To be eligible one must be a journalist visiting Kenya on the short term mission of not less than 6 weeks gathering news or capturing news or Filming sites in Kenya on behalf of the foreign organization.This letter of credit is granted to the following category of people.
- Only Journalist accreditation is required.
- Visiting crew must pick up and sign for the accreditation in Nairobi.
This standby letter of credit is valid for 3 months sometimes it depends on the entry permit.
- Processing permits for filming specific locations in Kenya takes 10 to 14 days.
- Getting approval for interviews with government officials requires 10 to 14 days.
- Getting approval for underwater, safari or aerial filming takes three weeks.
Processing time take less than a one month but because of the complexity it can exceed that time.
- Revolving letter of credit is useful to journalist who is intending to bring filming equipments into Kenya, then you need to obtain a standby Letter of credit which include a list of the Filming Equipments you intend to use.
- When you secure permission from the Foreign Affairs ministry Media Department of Kenya the traveling Delegates must be representing the newspaper or the TV network or the news agency that is sponsoring the traveling delegation or journalist.undertaking to reinstate a letter of credit either after the occurrence of a specific event or after a specific time period has lapsed.
- The bank works as a guarantee to the foreign organization that it holds an amount of money equal to that of the value of the specific equipment that will be entering Kenya.
- The sponsoring news organization MUST agree to post the amount of money needed to issue the letter of credit.
- The visiting delegations and journalists Must follow all rules and regulations during their stay including the prohibition of filming in areas without a permit.
- Documents customs clearance for the equipments to be brought into the country.
- A list of all the equipments to be brought into Kenya.
- A valid passport for less than 6 months to expire.
- A letter of proof from sponsoring organization. .
Need for the Document
A guarantee of payment issued by a bank on behalf of a client that is used as “payment of last resort” should the client fail to fulfill a contractual commitment with a third party. Standby letters of credit are created as a sign of good faith in business transactions, and are proof of a buyer’s credit quality and repayment abilities.
The bank issuing the SLOC will perform brief underwriting duties to ensure the credit quality of the party seeking the letter of credit, then send notification to the bank of the party requesting the letter of credit (typically a seller or creditor).
This is letter that exempts Traveling delegation from having to pay any custom dues on filming Equipments that are brought in Kenya, under the agreement that the equipment will be taken out of the country again when the Journalist leaves Kenya at the end of Filming.
The letter of credit should state that the newspaper or the TV network or the news agency that is sponsoring the traveling delegation or journalist guarantees that it holds an amount of money equal to that of the value of the specific equipment that will be entering Kenya. This letter MUST be issued by the Central Bank of Kenya or from another bank that has a branch in Kenya. ie Kenya commercial Bank.
A standby letter of credit will typically be in force for about one year, allowing for enough time for payment to be made through standard contractual guidelines.
The cost to obtain a standby letter of credit is typically 1-8% of the face amount annually, but the letter can be canceled as soon as the terms of the contract have been met by the purchaser or borrower.